[Federal Register Volume 75, Number 210 (Monday, November 1, 2010)]
[Rules and Regulations]
[Pages 67029-67031]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-27517]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 75, No. 210 / Monday, November 1, 2010 /
Rules and Regulations
[[Page 67029]]
DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Part 748
[Docket No. 101006492-0494-02 ]
RIN 0694-AF02
Amendment to Existing Validated End-User Authorization in the
People's Republic of China: Semiconductor Manufacturing International
Corporation
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Final rule.
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SUMMARY: In this action, the Bureau of Industry and Security (BIS)
amends the Export Administration Regulations (EAR) to remove one
facility from the list of Semiconductor Manufacturing International
Corporation (SMIC) facilities that are authorized to receive certain
items in the People's Republic of China (PRC) under SMIC's validated
end-user (VEU) authorization. Specifically, BIS removes Cension
Semiconductor Manufacturing Corporation (Cension) from SMIC's list of
approved VEU facilities in the PRC due to a material change at SMIC.
This amendment is not the result of prohibited activities by Cension or
by SMIC, nor does it establish any new license requirements or more
restrictive licensing policies for exports, reexports or transfers (in-
country) of items to the facility identified in this rule; license
requirements set forth in the EAR continue to apply to this facility.
DATES: This rule is effective November 1, 2010. Although there is no
formal comment period, public comments on this regulation are welcome
on a continuing basis.
ADDRESSES: You may submit comments, identified by RIN 0694-AF02 by any
of the following methods:
E-mail: [email protected]. Include ``RIN 0694-AF02'' in
the subject line of the message.
Fax: (202) 482-3355. Please alert the Regulatory Policy Division,
by calling (202) 482-2440, if you are faxing comments.
Mail or Hand Delivery/Courier: Sheila Quarterman, U.S. Department
of Commerce, Bureau of Industry and Security, Regulatory Policy
Division, 14th Street & Pennsylvania Avenue, NW., Room 2705,
Washington, DC 20230, Attn: RIN 0694-AF02.
Send comments regarding the collection of information associated
with this rule, including suggestions for reducing the burden, to
Jasmeet Seehra, Office of Management and Budget (OMB), by e-mail to
[email protected] or by fax to (202) 395-7285. Comments
on this collection of information should be submitted separately from
comments on the final rule (i.e., RIN 0694-AF02)--all comments on the
latter should be submitted by one of the three methods outlined above.
FOR FURTHER INFORMATION CONTACT: Karen Nies-Vogel, Chairman, End-User
Review Committee, Bureau of Industry and Security, U.S. Department of
Commerce, 14th Street & Pennsylvania Avenue, NW., Washington, DC 20230;
by telephone (202) 482-3811, or by e-mail to [email protected].
SUPPLEMENTARY INFORMATION:
Authorization Validated End-User
Consistent with U.S. Government policy to facilitate trade for
civilian end-users in the PRC, on June 19, 2007 BIS amended the EAR in
a final rule (72 FR 33646) to create a new authorization to allow
``validated end-users'' (VEUs) located in eligible destinations to
receive certain items through export, reexport or transfer (in-country)
under a general authorization rather than requiring a license. 15 CFR
748.15. Companies listed as VEUs may obtain eligible items that are on
the Commerce Control List, set forth in Supplement No. 1 to part 774 of
the EAR, without having to wait for their suppliers to obtain export
licenses from BIS. Eligible items may include commodities, software and
technology, except for those items that are controlled for missile
technology or crime control reasons.
Authorization VEU is a mechanism to facilitate increased high-
technology exports to companies in eligible destinations that have a
verifiable record of civilian uses for such items. The validated end-
users listed in Supplement No. 7 to Part 748 of the EAR were reviewed
and approved by the U.S. Government in accordance with the provisions
of Section 748.15 and Supplement Nos. 8 and 9 to Part 748 of the EAR.
In addition to U.S. exporters, Authorization VEU may be used by foreign
reexporters and persons transferring in-country, and does not have an
expiration date. Currently, VEUs are located in the PRC and India.
Removal of Cension Semiconductor Manufacturing Corporation (Cension)
From the List of Validated End-User Semiconductor Manufacturing
International Corporation's (SMIC's) Approved Facilities in the PRC
In a rule published in the Federal Register on October 19, 2007 (72
FR 59231), BIS designated SMIC as a VEU, thus authorizing certain
specific exports, reexports and transfers (in-country) to the five
listed facilities of the company, including Cension. Due to a material
change at the Cension facility of SMIC, and consistent with section
748.15 of the EAR, BIS now amends Supplement No. 7 to Part 748 of the
EAR to remove the Cension facility from that list of SMIC's approved
VEU facilities. This change leaves four SMIC facilities that are
approved to receive eligible items under SMIC's VEU authorization.
Cension's address (i.e., 3/F, 8-1 Kexin Road, Export Processing Zone
(West Area), Chengdu, China 611731) will also be removed from the list
of SMIC's authorized VEU facilities. As a result of this rule, the
Cension facility will no longer be authorized to receive items through
Authorization VEU. Thus, parties seeking to export, reexport or
transfer (in-country) items under the EAR to the Cension facility may
now have to obtain a license to do so, depending on the item at issue.
This amendment is not the result of prohibited activities by
Cension or SMIC. SMIC remains a qualified participant in the VEU
program and exports, reexports and transfers (in-country) of the items
controlled under the export control classification numbers listed in
SMIC's entry in Supplement No. 7 to Part 748 of the
[[Page 67030]]
EAR to the SMIC facilities listed in the same part may continue to be
made under Authorization VEU. Nor does this action establish any new
license requirements, or more restrictive licensing policies, for
exports, reexports or transfers (in-country) of items to the Cension
facility. Rather, the license requirements set forth in the EAR
continue to apply to this facility.
Note that this amendment applies only to transactions under
Authorization VEU involving SMIC's Cension facility. All conditions and
restrictions that applied to transactions that were undertaken pursuant
to Authorization VEU prior to the effective date of this amendment, and
that involve the Cension facility, continue to apply to those
transactions. These restrictions and conditions include any that were
imposed on this facility in connection with its eligibility for
Authorization VEU, as established by BIS in its communications
authorizing the Cension facility's participation in the VEU program.
Saving Clause
Shipments of items removed from eligibility for export, reexport or
transfer (in-country) under Authorization VEU (i.e., under the
designator VEU) as a result of this regulatory action that were on dock
for loading, on lighter, laden aboard an exporting carrier, or en route
aboard a carrier to a port of export, on November 1, 2010, pursuant to
actual orders for export, reexport or transfer (in-country) to an
eligible destination, may proceed to that destination under the
previously applicable Authorization so long as they are exported,
reexported or transferred (in-country) before November 16, 2010. Any
such items not actually exported, reexported or transferred (in-
country) before midnight, on November 16, 2010, require an individual
license or other applicable authorization under the EAR.
Since August 21, 2001, the Export Administration Act has been in
lapse and the President, through Executive Order 13222 of August 17,
2001 (3 CFR, 2001 Comp., p. 783 (2002)), as extended most recently by
the Notice of August 12, 2010 (75 FR 50681) (August 16, 2010), has
continued the EAR in effect under the International Emergency Economic
Powers Act. BIS continues to carry out the provisions of the Act, as
appropriate and to the extent permitted by law, pursuant to Executive
Order 13222.
Rulemaking Requirements
1. This final rule has been determined to be not significant for
the purposes of Executive Order 12866.
2. This rule involves information collections previously approved
by OMB under control number 0694-0088, ``Multi-Purpose Application''
(Form BIS 748). This collection has a burden hour estimate of 58
minutes for the preparation and submission of the form, and an
estimated burden of 30 minutes per submission for recordkeeping,
reporting and review requirements in connection with the Authorization
VEU program. Although this rule may result in a slight increase in
license applications, this rule is not expected to impact the
information collection request previously approved by OMB under control
number 0694-0088.
Notwithstanding any other provisions of law, no person is required
to respond to nor be subject to a penalty for failure to comply with a
collection of information, subject to the requirements of the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless that
collection of information displays a currently valid OMB Control
Number.
3. This rule does not contain policies with Federalism implications
as that term is defined under Executive Order 13132.
4. There is good cause under 5 U.S.C. 553(b)(B) to waive the
provisions of the Administrative Procedure Act (APA) requiring prior
notice and the opportunity for public comment because, specific to this
rule, they are unnecessary, impracticable and contrary to the public
interest.
In determining whether to grant or revoke validated end-user
designations, a committee of U.S. Government agencies evaluates a
variety of information, the nature and terms of which are set forth in
15 CFR part 748, Supplement No. 8. The criteria for evaluation by the
committee are set forth in 15 CFR 748.15(a)(2). The information,
commitments and criteria for this extensive review were all established
through the notice of proposed rulemaking and public comment process
(71 FR 38313, July 2, 2006 and 72 FR 33646, June 19, 2007). Thus,
authorization of a VEU is similar to granting a license: To receive
Authorization VEU, an application must be submitted on behalf of an
entity; the entity must be found to meet certain previously identified
criteria; and the application must be approved. Because the
authorization granted by BIS pursuant to 15 CFR Sec. 748.15 is similar
to that granted to exporters for individual licenses, which do not
undergo public review when they are approved, denied, revoked, or
amended, allowing public review and comments to this rule is
unnecessary.
The procedure for revocation of a facility from the Authorized VEU
list is similar to the license revocation procedure, and because this
rule involves revocation, public comment on it is unnecessary. During
the revocation procedure, the U.S. Government analyzes confidential
business information according to set criteria to determine whether a
given authorized VEU entity remains eligible for VEU status. Revocation
may, as in this case, be the result of a material change in
circumstance at the authorized facility. Examples of such a material
change include changes in the operational status of a VEU facility or
changes in the end-use of the products produced at the facility. Such
changes may result in a VEU or a VEU facility no longer meeting the
eligibility criteria for Authorization VEU, and thus may lead the U.S.
Government to modify or revoke VEU authorization. Facilities that
undergo material changes that result in their no longer meeting the
criteria to be eligible VEUs must, according to the VEU program, have
their VEU status revoked. Here, the Cension facility is no longer
eligible to be an Authorized VEU, and so, by the terms of the EAR and
the VEU program, the facility's VEU status must be revoked; thus public
comments on whether to revoke this status are unnecessary.
Additionally, allowing for prior public notice and comment on this
rule may be impracticable and contrary to the public interest. The EAR
advance U.S. national security, foreign policy, and economic objectives
by ensuring an effective export control system. In accordance with the
pre-set criteria, the U.S. Government reviews each VEU and its
facilities to ensure that exports, reexports and transfers (in-country)
of specified items to these entities are consistent with such
objectives. Accordingly, VEUs and their facilities may receive through
export, reexport or transfer (in-country) items that would otherwise
require a license and transaction-specific review, in part due to
national security concerns. However, the listed facility here is no
longer eligible to be an Authorized VEU facility, and in order to
protect national security, the restrictions of the EAR must be in place
as soon as possible. Allowing public comments to this rule would hinder
the ability of BIS to enforce the EAR's restrictions on exports without
a license to the listed facility, and therefore public comment on this
rule is both impracticable, because allowing such comment would prevent
BIS from undertaking its
[[Page 67031]]
statutory duties, and contrary to the public's national security
interests.
In addition, BIS finds good cause to waive the requirement of 5
U.S.C. 553(d)(3) to delay the effectiveness of this regulation, because
such a delay is contrary to the public's interest. When the U.S.
Government has been notified of or has identified a material change in
circumstances that warrants revocation or modification of VEU status
for an end-user or a facility of an end-user, there is a need to
quickly alert the public that the facility is no longer authorized as a
recipient of items under Authorization VEU. Delaying this action's
effectiveness could result in items that otherwise require licenses
being exported, reexported or transferred (in-country), license-free,
to an ineligible facility. Accordingly, it would be contrary to the
public interest to delay this rule's effectiveness.
No other law requires that a notice of proposed rulemaking and an
opportunity for public comment be given for this final rule. Because a
notice of proposed rulemaking and an opportunity for public comment are
not required to be given for this rule under the Administrative
Procedure Act or by any other law, the analytical requirements of the
Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not applicable
and no regulatory flexibility analysis has been prepared.
List of Subjects in 15 CFR Part 748
Administrative practice and procedure, Exports, Reporting and
recordkeeping requirements.
0
Accordingly, part 748 of the Export Administration Regulations (15 CFR
parts 730-774) is amended as follows:
PART 748--[AMENDED]
0
1. The authority citation for part 748 continues to read as follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66
FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 12, 2010 (75
FR 50681) (August 16, 2010).
0
2. Supplement No. 7 to part 748 is amended by removing ``Cension
Semiconductor Manufacturing Corporation'' and its address ``(3/F, 8-1
Kexin Road, Export Processing Zone (West Area), Chengdu, China
611731)'' from the list of ``Eligible Destinations'' for ``Validated
End-User'' ``Semiconductor Manufacturing International Corporation'' in
``China (People's Republic of)''.
Dated: October 26, 2010.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2010-27517 Filed 10-29-10; 8:45 am]
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